Foxtel iQ3 aims to rain on Netflix's parade

By Adam Turner

UpdatedMarch 20, 2015 — 7.45pmfirst published at 12.55pm

Foxtel's new iQ3 streaming video recorder launches on Monday, just hours before Netflix throws open its doors in Australia.

Say what you will about Australia's pay TV giant, it's done a better job of keeping up with the times than most people thought it would. While many old-world media giants stuck their head in the sand and hoped the internet would go away, Foxtel saw the writing on the wall and actually heeded the warning.

Netflix may have snatched back House of Cards, but Foxtel won't surrender Australian lounge rooms without a fight.

Talk of 100 Mbps fibre-to-the-premises for 93 per cent of Australian homes forced Foxtel's hand – dropping prices and embracing new streaming services like Foxtel Go and Foxtel Play. Online competition is less of a threat now that Australia is getting the new-look NBN-lite, but Foxtel's big online push over the last few years means that it's now well-placed to compete with the new generation of streaming services.

Foxtel's new iQ3 personal video recorder was built from the ground up to take advantage of Foxtel's streaming content. The iQ3 builds on the iQ2's Look Back reverse EPG, which lets you scroll back through the program guide to watch shows you missed. It also adds a Start Over feature which lets you jump back to the beginning if you start watching half-way through a show – a feature that's already available through Foxtel's tablet apps.

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These new features turn a Foxtel subscription into more of a Netflix-style on-demand service rather than the traditional linear viewing experience. It's not the iQ3's only nod to its new-world competitors, Foxtel is also adding "intelligent discovery" features which show you what's trending and even make suggestions based on your viewing habits.

More details will be revealed at Monday's launch, but there's also talk of the iQ3 adding local streaming features – sending recordings to Foxtel boxes in other rooms and perhaps to mobile gadgets. You might even be able to switch between devices and pick up watching where you left off, just like Netflix.

It's no coincidence that the iQ3 launches the day before the world's most popular streaming service finally turns its attention to Australia. Next Tuesday US streaming giant Netflix joins Presto, Stan and Quickflix in competing for slice of Australia's entertainment spend. Stan is co-owned by Fairfax Media, publisher of this website. Meanwhile Presto is co-owned by Foxtel, which is taking an each-way bet on the future of home entertainment.

At around $10 per month these streaming services are considerably cheaper than pay TV, but I'd say Foxtel is less vulnerable to the cable-cutter trend which has seen streaming services like Netflix and HuluPlus take a big bite out of US pay TV providers.

Struggling to make it into more than a third of Australian homes, Foxtel has fewer fair-weather subscribers than US cable giants. Foxtel subscribers are primarily interested in live sport, which they're not going to abandon in favour of Netflix. A rejig of Australia's anti-syphoning laws would certainly drive more homes to pay TV, but Foxtel can't bank on this alone. Existing customers need to feel that they're getting good value for money, and that's where the iQ3 comes in.

Are you on the cusp of subscribing to Foxtel, or perhaps abandoning your subscription in favour of Netflix? How can pay TV win your business in the internet age?